Chinese electric vehicle (EV) makers are calling for imposing a 25% tariff on large European cars with internal combustion engines (ICE), according to a report by state media outlet CCTV. This proposal responds to the European Union’s decision to increase import tariffs on China-made EVs by up to 38.1%.

The request was made during a closed-door meeting in Beijing on Tuesday between China’s Ministry of Commerce and representatives from six European and four Chinese auto manufacturers, as well as various industry and research bodies, CCTV says.

Around 250,000 ICE cars with engines 2.5 liter and more were imported to China in 2023.

The EU announced last week that it plans to increase tariffs on Chinese EVs following an investigation. State-owned automaker SAIC Motor (formerly Shanghai Automotive) is the most affected, being hit by combined tariffs of 48.1%. SAIC includes brands such as MG and IM. The MG was the best-selling Chinese EV brand in Germany in May.

During the meeting, a Chinese trade representative also accused the EU of using the investigation as a pretext to appropriate business secrets from Chinese EV manufacturers.

The suggestion to raise the temporary import tariff on cars with engines larger than 2.5 liters was initially proposed in an article by the state-controlled Global Times in May, preceding the EU’s probe.

According to the European Commission (EC), the new tariffs aim to ensure fair competition. Chinese increased their EV market share in the EU to 8.2% in 2023, up from 0.5% in 2019. They have also been preparing to build locally in Europe for a long time.

BYD is constructing a car plant in Hungary, Szeged, which should start production in 2025. Meanwhile, the Chinese Leapmotor T03 rolled off the production line in the Stellantis Polish plant on Tuesday. Great Wall Motor (GWM) is seeking a car plant location in Europe, and it was reported that it is deciding between Germany, Czechia, Poland, and Hungary. State-owned Chery Auto announced a car plant in Barcelona, Spain, which will help it mitigate the 31% tariffs it is facing, according to the company.

Despite the tariffs, some Chinese EV manufacturers, such as BYD, might be able to absorb the additional costs. BYD was subjected to extra duties of 17.4%, the lowest rate among the three Chinese manufacturers scrutinized by the European Commission and lower than the industry average of 21%. Those figures are on top of the existing 10% import duties.

Source: CCTV via ChinaDaily [CN]